Sibanye Gold flags H1 earnings per share loss

South Africa’s Sibanye Gold flagged up a first-half earnings per share loss on Thursday, citing provisions worth R1.1 billion ($84 million) for a possible settlement with miners who contracted lung diseases at work.

A class action suit, mostly relating to the fatal lung disease silicosis, was filed on behalf of miners in 2012 and has led to mounting provisions in an industry that has been battling for years with rising costs and generally depressed prices.

Sibanye flagged a first-half loss for the year ending June 30 2017, with a headline loss per share of at least 145 cents, against a profit of 79 cents in the same period last year, due to non-recurring items, including the provision for the workers and the average appreciation of the rand relative to the dollar.

Sibanye said the ultimate outcome of negotiations over the payout was uncertain and the provision could change in future.

Non-recurring items for the period were four fold higher than the comparative period, Sibanye said.

“The company has provided R1.1 billion ($82 million) before tax, for this obligation which impacts negatively on earnings for the period,” said Sibanye in a statement.

HEPS is the main profit measure in South Africa that strips out certain one-off items.

Shares in Sibanye were up 1.24% by 1000 GMT, as the market looked beyond what is viewed as one-off provisions.

“A lot of what we are seeing in the results are one-off impairments,” said Independent Securities trader Ryan Woods.

The companies expected to make the payments to the workers include some of the world’s biggest mining firms. Anglo American has set aside $101 million, Gold Fields made a provision of $30.2 million and Harmony Gold estimated its portion at R917 million ($70 million).